Five men were arrested after defrauding Apple of $12 million by trading fake iPhones for real ones

The counterfeit iPhone and iPad devices did not work, and after being swapped for genuine iPhones and iPads by Apple Store employees, the genuine Apple products were shipped out of the country. U.S. Attorney Martin Estrada said, “The defendants are accused of exploiting Apple’s customer service policies to steal over $12 million worth of merchandise. Companies should not be defrauded for responding to the needs of their customers, and these federal charges send the message that our agency will take decisive action to expose and prosecute the fraudsters.”

The five men, all Chinese nationals, were taken into custody last Thursday. Yang Song, Junwei Jiang, Zhengxuan Hu, Yushan Lin and Shuyi Xing are charged with aggravated identity theft, conspiracy to traffic in counterfeit goods and conspiracy to commit wire and mail fraud. The defendants face 20 years in prison for each count of conspiracy to commit fraud and up to two years in prison for identity theft. If found guilty of conspiracy to traffic in counterfeit goods, the five face 10 years in prison each.

The counterfeit iPhone and iPad devices were exchanged for genuine Apple products at various Apple Stores in Southern California

To make this plan work, the five worked with other members of the ring in China to deliver the non-working counterfeit iPhone and iPad devices to various locations in Southern California. You’re probably wondering why this scam wasn’t discovered by Apple Store employees. The counterfeit devices had identification numbers that matched genuine Apple products owned by U.S. consumers and still under warranty.

The defendants returned the counterfeit devices to more than 10 Apple Stores in Southern California, including areas such as Beverly Hills, Northridge and Rancho Cucamonga. On some days, the gang visited more than 10 Apple Stores in Southern California to exchange the counterfeit models for genuine ones.